Improvements at Rite Aid are on the horizon

WHAT IT MEANS AND WHY IT’S IMPORTANT — Rite Aid is a glass-half-full/glass-half-empty kind of company. If your glass is half full, you’re looking at the sequential improvements in pharmacy margins and front-end comps, and the excitement around the chain’s still-new Wellness+ loyalty program. If your glass is half empty, you’re making note of the seven straight quarters of script declines and the fact that Rite Aid had to lower sales projections … again. Our glass is half full.

(THE NEWS: Rite Aid’s new loyalty program a major bright spot in tough Q3. For the full story, click here)

Here’s the crux: The building blocks are in place. All Rite Aid now has to do is execute the potentially profit-driving programs it has in place — Wellness+, store segmentation, Save-A-Lot/Rite Aid combo stores, immunizing pharmacists and an expanding inoculation program. Additionally, it will need to continue pushing the envelope with some of its more cutting-edge initiatives, such as Internet-accessible video couponing and live pharmacist consultations, available online.

Not only is Rite Aid showing improvement across several metrics and is executing against concrete plans designed to continue that upward momentum, but the team that’s driving this engine also has done it all before — twice, when you factor in president and CEO John Standley, who helped engineer Rite Aid’s first turnaround earlier this decade and then went on to turn around Pathmark.

Many of the same executives walking through the halls of Rite Aid headquarters today were with the company 10 years ago, when that team inherited a company on the brink of bankruptcy and brought that company back to black. It was because of that team that Rite Aid could even consider an acquisition the size and scope of Brooks/Eckerd. And today you could argue that Rite Aid is once again on a path — rocky though it may be — back to the black.

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